U.S. Markets close in 3 hrs

BancorpSouth Announces Second Quarter 2019 Financial Results

TUPELO, Miss., July 17, 2019 /PRNewswire/ -- BancorpSouth Bank (BXS) (the "Company") today announced financial results for the quarter ended June 30, 2019.

Highlights for the second quarter of 2019 included:

  • Reported quarterly net income of $53.1 million, or $0.53 per diluted share.
  • Completed the acquisitions of Casey Bancorp, Inc. and Merchants Trust, Inc. effective April 1, 2019; recorded merger-related expenses of $3.1 million for the second quarter.
  • Earnings were impacted by a negative pre-tax mortgage servicing rights ("MSR") valuation adjustment of $8.8 million.
  • Record net operating income – excluding MSR – of $62.0 million, or $0.61 per diluted share, which represents an increase of 8.9 percent on a per share basis, compared with both the second quarter of 2018 and the first quarter of 2019.
  • Generated net organic loan growth for the quarter totaling approximately $170 million, or 5.2 percent on an annualized basis.
  • Net interest margin – excluding accretable yield – increased to 3.79 percent, compared with 3.74 percent for the first quarter of 2019.
  • Continued strong credit quality reflected by provision for credit losses of $0.5 million for the quarter; improvement in non-performing and classified asset levels.
  • Repurchased 611,821 shares of outstanding common stock at a weighted average price of $28.21 per share.

The Company reported net income of $53.1 million, or $0.53 per diluted share, for the second quarter of 2019, compared with net income of $54.0 million, or $0.55 per diluted share, for the second quarter of 2018 and net income of $51.6 million, or $0.52 per diluted share, for the first quarter of 2019.  The Company reported net operating income – excluding MSR – of $62.0 million, or $0.61 per diluted share, for the second quarter of 2019, compared with $55.6 million, or $0.56 per diluted share, for the second quarter of 2018 and $55.9 million, or $0.56 per diluted share, for the first quarter of 2019. 

Net operating income – excluding MSR – is a non-GAAP financial measure used by management to assess the core operating performance of the Company.  This measure excludes items such as recognized securities gains and losses, MSR valuation adjustments, restructuring charges, merger-related expenses, and certain other charges.  

"We are pleased to report record net operating income – excluding MSR – for the second quarter of 2019," remarked Dan Rollins, Chairman and Chief Executive Officer.  "While the negative MSR asset valuation adjustment adversely impacted our GAAP earnings, strong organic balance sheet results contributed to record net operating income – excluding MSR – of $62.0 million, or $0.61 per diluted share, for the second quarter.  We are particularly proud of the efforts of our bankers on both sides of the balance sheet.  We reported organic loan growth of approximately $170 million, or 5.2 percent annualized, while deposits were essentially flat on an organic basis in a quarter that typically experiences significant runoff of public fund balances.  Despite the MSR headwind, our mortgage team had a great quarter as well.  The current rate environment as well as seasonal increases in home purchase activity contributed to mortgage production and servicing revenue of $9.2 million for the quarter."

"We continue to see quality performance in other areas as well.  Our credit quality remains strong, reflected by the provision for credit losses of $0.5 million for the quarter.  We saw continued improvement in our net interest margin – excluding accretable yield – which increased to 3.79 percent for the quarter.  Finally, we continue to deploy capital as we successfully completed the acquisitions of Grand Bank of Texas and Merchants Bank in Alabama during the quarter while also repurchasing approximately 612,000 shares of our common stock."

Net Interest Revenue

Net interest revenue was $160.0 million for the second quarter of 2019, an increase of 12.6 percent from $142.1 million for the second quarter of 2018 and an increase of 4.9 percent from $152.6 million for the first quarter of 2019.  The fully taxable equivalent net interest margin was 3.87 percent for the second quarter of 2019, compared with 3.71 percent for the second quarter of 2018 and 3.86 percent for the first quarter of 2019.  Yields on net loans and leases were 5.12 percent for the second quarter of 2019, compared with 4.67 percent for the second quarter of 2018 and 5.09 percent for the first quarter of 2019, while yields on total interest earning assets were 4.61 percent for the second quarter of 2019, compared with 4.15 percent for the second quarter of 2018 and 4.57 percent for the first quarter of 2019.  The net interest margin, excluding accretable yield, was 3.79 percent for the second quarter of 2019, compared with 3.63 percent for the second quarter of 2018 and 3.74 percent for the first quarter of 2019 while yields on net loans and leases, excluding accretable yield, were 5.02 percent for the second quarter of 2019, compared with 4.57 percent for the second quarter of 2018 and 4.95 percent for the first quarter of 2019.  The average cost of deposits was 0.68 percent for the second quarter of 2019, compared with 0.34 percent for the second quarter of 2018 and 0.63 percent for the first quarter of 2019.

Balance Sheet Activity

Loans and leases, net of unearned income, increased $587.5 million during the second quarter of 2019.  This includes loans totaling $415.0 million acquired as a part of the Grand Bank and Merchants Bank mergers on April 1, 2019.  Excluding acquired loans, total loans increased approximately $170.0 million during the second quarter or, 5.2% on an annualized basis. 

Deposits increased $444.0 million during the second quarter of 2019.  This includes deposits totaling $529.0 million acquired as a part of the Grand Bank and Merchants Bank mergers on April 1, 2019.  Excluding acquired deposits, total deposits declined approximately $85.0 million during the quarter. Deposits have increased $1.07 billion since December 31, 2018.  Excluding acquired deposits, total deposits increased approximately $540.0 million during the first six months of the year, or, 7.7% on an annualized basis.

Provision for Credit Losses and Allowance for Credit Losses

Earnings for the second quarter of 2019 reflect a provision for credit losses of $0.5 million, compared with a provision of $2.5 million for the second quarter of 2018 and $0.5 million for the first quarter of 2019.  Net charge-offs for the second quarter of 2019 were $1.3 million, compared with net charge-offs of $2.0 million for the second quarter of 2018 and net charge-offs of $4.1 million for the first quarter of 2019.  The allowance for credit losses was $115.7 million, or 0.85 percent of net loans and leases, at June 30, 2019, compared with $119.9 million, or 0.97 percent of net loans and leases, at June 30, 2018 and $116.5 million, or 0.89 percent of net loans and leases, at March 31, 2019.  The allowance for credit losses coverage metrics were impacted by loans acquired in the acquisitions that closed during the fourth quarter of 2018 and the second quarter of 2019.

Total non-performing assets were $96.0 million, or 0.70 percent of net loans and leases, at June 30, 2019, compared with $81.2 million, or 0.65 percent of net loans and leases, at June 30, 2018, and $97.0 million, or 0.74 percent of net loans and leases, at March 31, 2019.  Other real estate owned was $6.2 million at June 30, 2019, compared with $7.8 million at June 30, 2018 and $9.7 million at March 31, 2019.

Noninterest Revenue

Noninterest revenue was $66.3 million for the second quarter of 2019, compared with $72.5 million for the second quarter of 2018 and $64.2 million for the first quarter of 2019.  These results include a negative MSR valuation adjustment of $8.8 million for the second quarter of 2019, compared with a negative MSR valuation adjustment of $0.2 million for the second quarter of 2018 and a negative MSR valuation adjustment of $4.9 million for the first quarter of 2019.  Valuation adjustments in the MSR asset are driven primarily by fluctuations in interest rates period over period.   

Excluding the MSR valuation adjustment, mortgage banking revenue was $9.2 million for the second quarter of 2019, compared with $7.1 million for the second quarter of 2018 and $6.9 million for the first quarter of 2019.  Mortgage origination volume for the second quarter of 2019 was $495.5 million, compared with $523.7 million for the second quarter of 2018 and $291.7 million for the first quarter of 2019.  Of the total mortgage origination volume for the second quarter of 2019, $153.7 million was portfolio loans, compared with $209.3 million for the second quarter of 2018 and $54.1 million for the first quarter of 2019.

Credit card, debit card, and merchant fee revenue was $10.2 million for the second quarter of 2019, compared with $10.5 million for the second quarter of 2018 and $8.9 million for the first quarter of 2019.  Deposit service charge revenue was $11.1 million for the second quarter of 2019, compared with $10.8 million for both the second quarter of 2018 and the first quarter of 2019.  Wealth management revenue was $5.9 million for the second quarter of 2019, compared with $5.7 million for the second quarter of 2018 and $5.6 million for the first quarter of 2019.  Other noninterest revenue was $4.8 million for the second quarter of 2019, compared with $5.5 million for the second quarter of 2018 and $6.7 million for the first quarter of 2019.  Insurance commission revenue was $34.0 million for the second quarter of 2019, compared with $33.0 million for the second quarter of 2018 and $30.2 million for the first quarter of 2019. 

Noninterest Expense

Noninterest expense for the second quarter of 2019 was $157.7 million, compared with $145.2 million for the second quarter of 2018 and $150.0 million for the first quarter of 2019.  Salaries and employee benefits expense was $101.0 million for the second quarter of 2019, compared with $91.5 million for the second quarter of 2018 and $97.2 million for the first quarter of 2019.  Occupancy expense was $12.0 million for the second quarter of 2019, compared with $11.1 million for the second quarter of 2018 and $11.6 million for the first quarter of 2019.  Other noninterest expense was $38.1 million for the second quarter of 2019, compared with $35.7 million for the second quarter of 2018 and $34.6 million for the first quarter of 2019.  Additionally, merger-related expense for the second quarter of 2019 was $3.1 million, compared with merger-related expense of $1.9 million for the second quarter of 2018 and $0.9 million for the first quarter of 2019. 

Capital Management

The Company's equity capitalization is comprised entirely of common stock.  The Company's ratio of shareholders' equity to assets was 12.29 percent at June 30, 2019, compared with 12.03 percent at June 30, 2018 and 12.16 percent at March 31, 2019.  The ratio of tangible shareholders' equity to tangible assets was 8.42 percent at June 30, 2019, compared with 8.71 percent at June 30, 2018 and 8.41 percent at March 31, 2019.

During the second quarter of 2019, the Company repurchased 611,821 shares of its outstanding common stock at a weighted average price of $28.21 per share pursuant to its share repurchase program, which is intended to comply with Rules 10b-18 and 10b5-1 promulgated under the Securities and Exchange Act of 1934, as amended (the "Exchange Act").  During the first quarter of 2019, the Company repurchased 1,000,000 shares of its outstanding common stock at a weighted average price of $27.60 per share.  As of June 30, 2019, the Company had 1,388,179 remaining shares available for repurchase under its current share repurchase authorization, which expires on December 31, 2019.  

Estimated regulatory capital ratios at June 30, 2019 were calculated in accordance with the Basel III capital framework.  The Company is a "well capitalized" bank, as defined by federal regulations, at June 30, 2019, with Tier 1 risk-based capital of 10.52 percent and total risk-based capital of 11.28 percent, compared with required minimum levels of 8 percent and 10 percent, respectively, in order to qualify for "well capitalized" classification. 

Summary

Rollins concluded, "We are very pleased with our second quarter financial results.  We reported meaningful organic loan growth while our deposit results were better than anticipated given the normal second quarter seasonal headwind for deposits.   We also reported growth in many of our other product offerings as well.  Our mortgage production benefitted from the rate environment while our insurance and wealth management teams also reported revenue growth on both a sequential and comparable quarter basis.  This balance sheet and revenue growth, combined with continued disciplined expense management, resulted in our operating efficiency ratio – excluding MSR – declining to its lowest level in several years.   Finally, we are pleased to have closed the transactions with Grand Bank and Merchants Bank.  The operational integrations for these two banks were completed late in the second quarter."

TRANSACTIONS

Van Alstyne Financial Corporation & Summit Financial Enterprises, Inc.

On March 5, 2019, the Company announced the signing of definitive merger agreements with Van Alstyne Financial Corporation and its wholly owned subsidiary, Texas Star Bank, (collectively referred to as "Texas Star"), pursuant to which Texas Star agreed to be merged with and into the Company and with Summit Financial Enterprises, Inc. and its wholly owned subsidiary, Summit Bank, (collectively referred to as "Summit"), pursuant to which Summit agreed to be merged with and into the Company.  Texas Star operates 7 full-service banking offices in Collin and Grayson counties in Texas, and one loan production office in Durant, Oklahoma, while Summit operates 4 offices located in Panama City, Panama City Beach, Fort Walton Beach, and Pensacola, Florida.  As of June 30, 2019, Texas Star and Summit collectively reported total assets of $905.6 million, total loans of $610.7 million and total deposits of $799.8 million.  Under the collective terms of the agreements, the Company expects to issue approximately 4,600,000 shares of the Company's common stock plus $40.5 million in cash for all outstanding shares of each institution.  For more information regarding these transactions, see our Current Report on Form 8-K that was filed with the Federal Deposit Insurance Corporation ("FDIC") on March 5, 2019.  Subject to the satisfaction of all closing conditions, including the receipt of all required regulatory approvals, these mergers are expected to be completed during the second half of 2019, although the Company can provide no assurance that the mergers will close during this time period or at all.

Casey Bancorp, Inc. & Merchants Trust, Inc.

On April 1, 2019, the Company completed the merger with Casey Bancorp, Inc. and its wholly owned subsidiary, Grand Bank of Texas, (collectively referred to as "Grand Bank"), pursuant to which Grand Bank was merged with and into the Company and with Merchants Trust, Inc. and its wholly owned subsidiary, Merchants Bank (collectively referred to as "Merchants"), pursuant to which Merchants was merged with and into the Company.  Grand Bank operated 4 full-service banking offices in the cities of Dallas, Grand Prairie, Horseshoe Bay and Marble Falls, all in Texas, while Merchants, which was based in Jackson, Alabama, operated 6 full-service banking offices in Clarke and Mobile counties in Alabama.  As of April 1, 2019, Grand Bank and Merchants collectively reported total assets of $566.0 million, total loans of $415.0 million and total deposits of $529.0 million.  Under the collective terms of agreements, the Company issued approximately 2,225,000 shares of the Company's common stock plus $24.2 million in cash for all outstanding shares of each institution.  For more information regarding these transactions, see our Current Report on Form 8-K that was filed with the FDIC on April 1, 2019.  The purchase accounting for these transactions is considered provisional as management continues to identify and assess information regarding the nature of the acquired assets and liabilities and reviews the associated valuation assumptions and methodologies.

Icon Capital Corporation

Effective October 1, 2018, the Company completed the merger with Icon Capital Corporation and its wholly owned subsidiary, Icon Bank of Texas, National Association (collectively referred to as "Icon"), pursuant to which Icon was merged with and into the Company (the "Icon Merger").  Icon was headquartered in Houston, Texas and operated 7 full-service banking offices in the Houston, Texas metropolitan area.  As of October 1, 2018, Icon, on a consolidated basis, reported total assets of $760.4 million, total loans of $650.4 million and total deposits of $675.8 million.  Under the terms of the definitive merger agreement, the Company issued approximately 4,125,000 shares of the Company's common stock plus $17.5 million in cash, $7 million of which was placed in a separate non-interest bearing escrow account that is to be paid if certain conditions are met, as described in the Current Report on Form 8-K filed with the FDIC on October 1, 2018, for all outstanding shares of Icon Capital Corporation's capital stock.  For more information regarding the Icon Merger, see our Current Report on Form 8-K that was filed with the FDIC on October 1, 2018.  The purchase accounting for this transaction is considered provisional as management continues to identify and assess information regarding the nature of the acquired assets and liabilities and reviews the associated valuation assumptions and methodologies.

Non-GAAP Measures and Ratios

This news release presents certain financial measures and ratios that are not calculated in accordance with U.S. generally accepted accounting principles ("GAAP").  A discussion regarding these non-GAAP measures and ratios, including reconciliations of non-GAAP measures to the most directly comparable GAAP measures and definitions for non-GAAP ratios, appears under the caption "Reconciliation of Non-GAAP Measures and Other Non-GAAP Ratio Definitions"  beginning on page 21 of this news release.

Conference Call and Webcast

The Company will conduct a conference call to discuss its second quarter 2019 financial results on July 18, 2019, at 10:00 a.m. (Central Time).  This conference call will be an interactive session between management and analysts. Interested parties may listen to this live conference call via Internet webcast by accessing www.BancorpSouth.investorroom.com/Webcasts. The webcast will also be available in archived format at the same address.

About BancorpSouth Bank

BancorpSouth Bank (BXS) is headquartered in Tupelo, Mississippi, with approximately $19 billion in assets.  BancorpSouth operates approximately 295 full service branch locations as well as additional mortgage, insurance, and loan production offices in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee and Texas, including an insurance location in Illinois.  BancorpSouth is committed to a culture of respect, diversity, and inclusion in both its workplace and communities. To learn more, visit our Community Commitment page at www.bancorpsouth.com.  Like us on Facebook; follow us on Twitter: @MyBXS; or connect with us through LinkedIn.

Forward-Looking Statements

Certain statements contained in this news release may not be based upon historical facts and are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act, as amended. These forward-looking statements may be identified by their reference to a future period or periods or by the use of forward-looking terminology such as "anticipate," "believe," "could," "estimate," "expect," "foresee," "hope," "intend," "may," "might," "plan," "will," or "would" or future or conditional verb tenses and variations or negatives of such terms. These forward-looking statements include, without limitation, those relating to the benefits, costs, synergies and financial and operational impact of the Icon, Grand Bank, Merchants, Texas Star and Summit Mergers (referred to collectively as the "Mergers") on the Company, the acceptance by customers of Icon, Grand Bank, Merchants, Texas Star and Summit of the Company's products and services after the closing of the Mergers, the opportunities to enhance market share in certain markets and market acceptance of the Company generally in new markets, the Company's ability to operate its regulatory compliance programs consistent with federal, state and local laws, including its Bank Secrecy Act ("BSA") and anti-money laundering ("AML") compliance program and its fair lending compliance program, the Company's compliance with the consent order it entered into with the Consumer Financial Protection Bureau and the United States Department of Justice related to the Company's fair lending practices (the "Consent Order"), the impact of the Tax Cuts and Jobs Act of 2017 on the Company and its operations and financial performance, amortization expense for intangible assets, goodwill impairments, loan impairment, utilization of appraisals and inspections for real estate loans, maturity, renewal or extension of construction, acquisition and development loans, net interest revenue, fair value determinations, the amount of the Company's non-performing loans and leases, credit quality, credit losses, liquidity, off-balance sheet commitments and arrangements, valuation of mortgage servicing rights, allowance and provision for credit losses, early identification and resolution of credit issues, utilization of non-GAAP financial measures, the ability of the Company to collect all amounts due according to the contractual terms of loan agreements, the Company's reserve for losses from representation and warranty obligations, the Company's foreclosure process related to mortgage loans, the resolution of non-performing loans that are collaterally dependent, real estate values, fully-indexed interest rates, interest rate risk, interest rate sensitivity, the impact of interest rates on loan yields, calculation of economic value of equity, impaired loan charge-offs, diversification of the Company's revenue stream, the growth of the Company's insurance business and commission revenue, the growth of the Company's customer base and loan, deposit and fee revenue sources, liquidity needs and strategies, sources of funding, net interest margin, declaration and payment of dividends, the utilization of the Company's share repurchase program, the implementation and execution of cost saving initiatives, improvement in the Company's efficiencies, operating expense trends, future acquisitions, dispositions and other strategic growth opportunities and initiatives and the impact of certain claims and ongoing, pending or threatened litigation, administrative and investigatory matters.

The Company cautions readers not to place undue reliance on the forward-looking statements contained in this news release, in that actual results could differ materially from those indicated in such forward-looking statements as a result of a variety of factors. These factors may include, but are not limited to, the Company's ability to operate its regulatory compliance programs consistent with federal, state and local laws, including its BSA/AML compliance program and its fair lending compliance program, the Company's ability to successfully implement and comply with the Consent Order, the ability of the Company to meet expectations regarding the benefits, costs, synergies, and financial and operational impact of the Mergers, the possibility that any of the anticipated benefits, costs, synergies and financial and operational improvements of the Mergers will not be realized or will not be realized as expected, the ability of the Company and Texas Star and Summit to complete the Texas Star Merger and Summit Merger, the ability of the Company and Texas Star and Summit to satisfy the conditions to the completion of the Texas Star Merger and Summit Merger, including the receipt of all regulatory approvals required for the Texas Star Merger and Summit Merger on the terms expected in the Texas Star Merger Agreement and the Summit Merger Agreement, the ability of the Company and Texas Star and Summit to meet expectations regarding the timing, completion and accounting and tax treatments of the Texas Star Merger and Summit Merger, the possibility that any of the anticipated benefits of the Texas Star Merger and Summit Merger will not be realized or will not be realized as expected, the failure of the Texas Star Merger or Summit Merger to close for any other reason, the effect of any announcements regarding the Texas Star Merger or Summit Merger on the Company's operating results, the possibility that the Texas Star Merger and Summit Merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events, the lack of availability of the Company's filings mandated by the Exchange Act from the Securities and Exchange Commission's publicly available website after November 1, 2017, the impact of any ongoing pending or threatened litigation, administrative and investigatory matters involving the Company, conditions in the financial markets and economic conditions generally, the adequacy of the Company's provision and allowance for credit losses to cover actual credit losses, the credit risk associated with real estate construction, acquisition and development loans, limitations on the Company's ability to declare and pay dividends, the availability of capital on favorable terms if and when needed, liquidity risk, governmental regulation, including the Dodd-Frank Act, and supervision of the Company's operations, the short-term and long-term impact of changes to banking capital standards on the Company's regulatory capital and liquidity, the impact of regulations on service charges on the Company's core deposit accounts, the susceptibility of the Company's business to local economic and environmental conditions, the soundness of other financial institutions, changes in interest rates, the impact of monetary policies and economic factors on the Company's ability to attract deposits or make loans, volatility in capital and credit markets, reputational risk, the impact of the Tax Cuts and Jobs Act of 2017 on the Company and its operations and financial performance, the impact of the loss of any key Company personnel, the impact of hurricanes or other adverse weather events, any requirement that the Company write down goodwill or other intangible assets, diversification in the types of financial services the Company offers, the growth of the Company's insurance business and commission revenue, the growth of the Company's loan, deposit and fee revenue sources, the Company's ability to adapt its products and services to evolving industry standards and consumer preferences, competition with other financial services companies, risks in connection with completed or potential acquisitions, dispositions and other strategic growth opportunities and initiatives, the Company's growth strategy, interruptions or breaches in the Company's information system security, the failure of certain third-party vendors to perform, unfavorable ratings by rating agencies, dilution caused by the Company's issuance of any additional shares of its common stock to raise capital or acquire other banks, bank holding companies, financial holding companies and insurance agencies, the utilization of the Company's share repurchase program, the implementation and execution of cost saving initiatives, other factors generally understood to affect the assets, business, cash flows, financial condition, liquidity, prospects and/or results of operations of financial services companies and other factors detailed from time to time in the Company's press and news releases, reports and other filings with the Federal Deposit Insurance Corporation. Forward-looking statements speak only as of the date that they were made, and, except as required by law, the Company does not undertake any obligation to update or revise forward-looking statements to reflect events or circumstances that occur after the date of this news release.

 

 

 

BancorpSouth Bank

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)


















Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended

Year to Date

Year to Date


6/30/2019

3/31/2019

12/31/2018

9/30/2018

6/30/2018

6/30/2019

6/30/2018

Earnings Summary:








Interest revenue

$                    191,063

$                    181,133

$                    178,850

$                    163,158

$                    159,290

$            372,196

$            311,485

Interest expense

31,046

28,579

25,969

21,023

17,162

59,625

31,279

Net interest revenue

160,017

152,554

152,881

142,135

142,128

312,571

280,206

Provision for credit losses

500

500

1,000

-

2,500

1,000

3,500

Net interest revenue, after provision








   for credit losses

159,517

152,054

151,881

142,135

139,628

311,571

276,706

Noninterest revenue

66,332

64,220

59,031

71,616

72,456

130,552

151,390

Noninterest expense

157,674

149,968

152,342

142,409

145,182

307,642

292,883

Income before income taxes

68,175

66,306

58,570

71,342

66,902

134,481

135,213

Income tax expense

15,118

14,708

11,473

4,659

12,856

29,826

27,676

Net income

$                      53,057

$                      51,598

$                      47,097

$                      66,683

$                      54,046

$            104,655

$            107,537









Balance Sheet - Period End Balances








Total assets

$               18,936,814

$               18,314,183

$               18,001,540

$               17,249,175

$               17,222,491

$       18,936,814

$       17,222,491

Total earning assets

16,948,009

16,426,872

16,144,098

15,594,549

15,600,037

16,948,009

15,600,037

Total securities

2,760,732

2,692,499

2,749,188

2,826,359

2,828,754

2,760,732

2,828,754

Loans and leases, net of unearned income

13,658,527

13,071,059

13,112,149

12,449,995

12,418,114

13,658,527

12,418,114

Allowance for credit losses

115,691

116,499

120,070

121,019

119,920

115,691

119,920

Net book value of acquired loans (included in loans and leases above)

1,421,303

1,191,673

1,310,089

835,939

926,996

1,421,303

926,996

Remaining loan mark on acquired loans

38,408

30,782

37,366

13,368

14,485

38,408

14,485

Total deposits

15,136,648

14,692,609

14,069,966

13,347,193

13,476,558

15,136,648

13,476,558

Long-term debt

5,271

5,503

6,213

33,182

33,214

5,271

33,214

Total shareholders' equity

2,327,120

2,226,585

2,205,737

2,116,375

2,072,083

2,327,120

2,072,083









Balance Sheet - Average Balances








Total assets

$               18,637,258

$               18,033,513

$               17,879,081

$               17,059,865

$               17,094,283

$       18,337,053

$       17,006,910

Total earning assets

16,693,115

16,156,235

16,056,656

15,465,260

15,496,007

16,426,158

15,435,507

Total securities

2,733,335

2,704,383

2,784,437

2,814,751

2,906,235

2,718,939

2,936,408

Loans and leases, net of unearned income

13,549,591

13,078,221

13,063,422

12,433,701

12,334,756

13,315,208

12,210,081

Total deposits

15,080,885

14,445,834

14,072,416

13,387,849

13,539,324

14,765,114

13,551,350

Long-term debt

5,403

5,826

17,403

33,196

33,147

5,613

33,787

Total shareholders' equity

2,298,512

2,212,748

2,191,852

2,089,746

2,051,452

2,255,866

2,032,153









Nonperforming Assets:








Non-accrual loans and leases

$                      71,076

$                      68,949

$                      70,555

$                      55,532

$                      60,045

$              71,076

$              60,045

Loans and leases 90+ days past due, still accruing

8,053

8,471

18,695

2,934

6,335

8,053

6,335

Restructured loans and leases, still accruing

10,676

9,874

7,498

7,564

6,982

10,676

6,982

Non-performing loans (NPLs)

89,805

87,294

96,748

66,030

73,362

89,805

73,362

Other real estate owned

6,179

9,686

9,276

4,301

7,828

6,179

7,828

Non-performing assets (NPAs)

$                      95,984

$                      96,980

$                    106,024

$                      70,331

$                      81,190

$              95,984

$              81,190









Financial Ratios and Other Data:








Return on average assets

1.14%

1.16%

1.05%

1.55%

1.27%

1.15%

1.28%

Operating return on average assets-excluding MSR*

1.33%

1.26%

1.25%

1.28%

1.31%

1.30%

1.30%

Return on average shareholders' equity

9.26%

9.46%

8.52%

12.66%

10.57%

9.36%

10.67%

Operating return on average shareholders' equity-excluding MSR*

10.82%

10.24%

10.20%

10.45%

10.88%

10.54%

10.84%

Return on tangible equity*

13.94%

14.16%

12.81%

17.76%

15.00%

13.82%

15.01%

Operating return on tangible equity-excluding MSR*

16.28%

15.34%

15.33%

14.66%

15.44%

15.57%

15.25%

Noninterest income to average assets

1.43%

1.44%

1.31%

1.67%

1.70%

1.44%

1.80%

Noninterest expense to average assets

3.39%

3.37%

3.38%

3.31%

3.41%

3.38%

3.47%

Net interest margin-fully taxable equivalent

3.87%

3.86%

3.80%

3.67%

3.71%

3.86%

3.69%

Net interest margin-fully taxable equivalent, excluding net accretion








  on acquired loans and leases

3.79%

3.74%

3.71%

3.62%

3.63%

3.77%

3.62%

Net interest rate spread

3.56%

3.56%

3.53%

3.43%

3.52%

3.56%

3.52%

Efficiency ratio (tax equivalent)*

69.36%

68.85%

71.52%

66.29%

67.31%

69.11%

67.48%

Operating efficiency ratio-excluding MSR (tax equivalent)*

65.46%

66.89%

66.86%

66.34%

66.36%

66.19%

66.57%

Loan/deposit ratio

90.23%

88.96%

93.19%

93.28%

92.15%

90.23%

92.15%

Price to earnings multiple (avg)

13.26

16.60

11.67

15.07

17.07

13.26

17.07

Market value to book value

125.60%

125.56%

118.27%

152.23%

156.95%

125.60%

156.95%

Market value to book value (avg)

125.47%

132.05%

131.34%

158.19%

159.33%

126.90%

158.10%

Market value to tangible book value

191.45%

189.14%

178.79%

216.28%

225.06%

191.45%

225.06%

Market value to tangible book value (avg)

191.25%

198.92%

198.55%

224.75%

228.47%

193.43%

226.70%

Employee FTE

4,581

4,370

4,445

4,270

4,366

4,581

4,366









*Denotes non-GAAP financial measure.  Refer to related disclosure and reconciliation on pages 21 and 22.








 

 

BancorpSouth Bank

Selected Financial Information

(Dollars in thousands, except per share data)

(Unaudited)


















Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended

Quarter Ended

Year to Date

Year to Date


6/30/2019

3/31/2019

12/31/2018

9/30/2018

6/30/2018

6/30/2019

6/30/2018









Credit Quality Ratios:








Net charge-offs(recoveries) to average loans and leases (annualized)

0.04%

0.12%

0.06%

(0.04%)

0.07%

0.08%

0.03%

Provision for credit losses to average loans and leases (annualized)

0.01%

0.02%

0.03%

0.00%

0.08%

0.02%

0.06%

Allowance for credit losses to net loans and leases

0.85%

0.89%

0.92%

0.97%

0.97%

0.85%

0.97%

Allowance for credit losses to net loans and leases, excluding acquired loans and leases

0.95%

0.98%

1.02%

1.04%

1.05%

0.95%

1.05%

Allowance for credit losses to non-performing loans and leases

128.83%

133.46%

124.11%

183.28%

163.46%

128.83%

163.46%

Allowance for credit losses to non-performing assets

120.53%

120.13%

113.25%

172.07%

147.70%

120.53%

147.70%

Non-performing loans and leases to net loans and leases

0.66%

0.67%

0.74%

0.53%

0.59%

0.66%

0.59%

Non-performing assets to net loans and leases

0.70%

0.74%

0.81%

0.56%

0.65%

0.70%

0.65%









Equity Ratios:








Total shareholders' equity to total assets

12.29%

12.16%

12.25%

12.27%

12.03%

12.29%

12.03%

Tangible shareholders' equity to tangible assets*

8.42%

8.41%

8.46%

8.96%

8.71%

8.42%

8.71%

















Capital Adequacy:








Common  Equity Tier 1 capital

10.52%

10.75%

10.84%

11.71%

11.42%

10.52%

11.42%

Tier 1 capital

10.52%

10.75%

10.84%

11.71%

11.42%

10.52%

11.42%

Total capital

11.28%

11.55%

11.68%

12.60%

12.30%

11.28%

12.30%

Tier 1 leverage capital

8.96%

9.03%

9.06%

9.68%

9.38%

8.96%

9.38%

   Estimated for current quarter
















Common Share Data:








Basic earnings per share

$                          0.53

$                          0.52

$                          0.47

$                          0.68

$                          0.55

1.05

$                  1.09

Diluted earnings per share

0.53

0.52

0.47

0.67

0.55

1.04

1.09

Operating earnings per share*

0.55

0.52

0.51

0.57

0.56

1.07

1.14

Operating earnings per share- excluding MSR*

0.61

0.56

0.57

0.56

0.56

1.18

1.10

Cash dividends per share

0.17

0.17

0.17

0.17

0.14

0.34

0.28

Book value per share

23.12

22.48

22.10

21.48

20.99

23.12

20.99

Tangible book value per share*

15.17

14.92

14.62

15.12

14.64

15.17

14.64

Market value per share (last)

29.04

28.22

26.14

32.70

32.95

29.04

32.95

Market value per share (high)

31.10

33.45

33.50

35.40

35.45

33.45

35.55

Market value per share (low)

26.92

25.76

24.31

32.45

30.60

25.76

30.60

Market value per share (avg)

29.01

29.68

29.03

33.98

33.45

29.34

33.19

Dividend payout ratio

32.24%

32.78%

35.93%

25.15%

25.62%

32.51%

25.73%

Total shares outstanding

100,651,798

99,066,856

99,797,271

98,525,516

98,700,509

100,651,798

98,700,509

Average shares outstanding - basic

100,610,746

99,506,952

99,541,965

98,646,087

98,906,619

100,058,849

98,836,204

Average shares outstanding - diluted

100,888,164

99,717,119

99,720,219

98,819,905

99,057,054

100,302,641

98,999,661

















Yield/Rate:








(Taxable equivalent basis)








Loans, loans held for sale, and leases net of unearned income

5.12%

5.09%

4.94%

4.72%

4.67%

5.11%

4.63%

Loans, loans held for sale, and leases net of unearned income, excluding








  net accretion on acquired loans and leases

5.02%

4.95%

4.83%

4.64%

4.57%

4.98%

4.54%

Available-for-sale securities:








  Taxable

2.10%

2.04%

1.92%

1.80%

1.77%

2.07%

1.74%

  Tax-exempt

4.53%

4.63%

4.47%

4.40%

4.39%

4.58%

4.34%

Short-term, FHLB and other equity investments

2.52%

2.67%

2.84%

2.04%

2.02%

2.59%

1.70%

  Total interest earning assets and revenue

4.61%

4.57%

4.45%

4.21%

4.15%

4.59%

4.10%

Deposits

0.68%

0.63%

0.52%

0.43%

0.34%

0.66%

0.33%

  Demand - interest bearing

0.91%

0.85%

0.70%

0.59%

0.43%

0.88%

0.39%

  Savings

0.29%

0.30%

0.30%

0.24%

0.15%

0.29%

0.14%

  Other time

1.60%

1.46%

1.26%

1.06%

0.95%

1.53%

0.92%

Short-term borrowings

2.14%

2.16%

2.06%

1.79%

1.62%

2.15%

1.45%

Total interest bearing deposits and short-term borrowings

1.06%

1.01%

0.91%

0.77%

0.62%

1.03%

0.57%

Long-term debt

4.87%

4.88%

4.12%

4.06%

4.11%

4.88%

4.14%

  Total interest bearing liabilities and expense

1.06%

1.01%

0.92%

0.78%

0.63%

1.03%

0.58%

Interest bearing liabilities to interest earning assets

70.47%

71.15%

69.79%

69.12%

70.27%

70.80%

70.59%

Net interest tax equivalent adjustment

$                           974

$                        1,035

$                        1,088

$                        1,088

$                        1,119

$                2,009

$                2,444









*Denotes non-GAAP financial measure.  Refer to related disclosure and reconciliation on pages 21 and 22.








 

 

BancorpSouth Bank

Consolidated Balance Sheets

(Unaudited)








Jun-19

Mar-19

Dec-18

Sep-18

Jun-18


(Dollars in thousands)

Assets






Cash and due from banks

$                212,080

$                207,486

$                239,960

$                169,493

$                198,374

Interest bearing deposits with other banks






and Federal funds sold

314,172

490,667

92,476

138,677

152,566

Available-for-sale securities, at fair value

2,760,732

2,692,499

2,749,188

2,826,359

2,828,754

Loans and leases

13,674,990

13,086,801

13,129,012

12,464,877

12,433,152

  Less:  Unearned income

16,463

15,742

16,863

14,882

15,038

             Allowance for credit losses

115,691

116,499

120,070

121,019

119,920

Net loans and leases

13,542,836

12,954,560

12,992,079

12,328,976

12,298,194

Loans held for sale

175,898

138,379

140,300

132,080

153,396

Premises and equipment, net

447,564

432,540

361,859

342,947

339,372

Accrued interest receivable

60,598

59,038

57,054

56,369

51,921

Goodwill

734,473

699,073

695,720

590,292

588,004

Other identifiable intangibles

65,930

49,396

50,896

36,475

39,031

Bank owned life insurance

315,398

305,315

308,324

304,687

306,116

Other real estate owned

6,179

9,686

9,276

4,301

7,828

Other assets

300,954

275,544

304,408

318,519

258,935

Total Assets

$           18,936,814

$           18,314,183

$           18,001,540

$           17,249,175

$           17,222,491

Liabilities






Deposits:






  Demand:  Noninterest bearing

$             4,329,172

$             4,201,695

$             4,124,744

$             4,007,158

$             4,135,322

                  Interest bearing

6,511,332

6,353,731

5,898,851

5,535,689

5,509,901

  Savings

1,861,247

1,855,024

1,836,167

1,783,602

1,810,149

  Other time

2,434,897

2,282,159

2,210,204

2,020,744

2,021,186

Total deposits

15,136,648

14,692,609

14,069,966

13,347,193

13,476,558

Securities sold under agreement to repurchase

439,541

481,567

416,008

403,724

407,704

Federal funds purchased






   and other short-term borrowing

730,000

630,000

1,095,000

1,095,000

1,025,022

Accrued interest payable

12,225

9,718

8,543

7,330

5,961

Long-term debt

5,271

5,503

6,213

33,182

33,214

Other liabilities

286,009

268,201

200,073

246,371

201,949

Total Liabilities

16,609,694

16,087,598

15,795,803

15,132,800

15,150,408

Shareholders' Equity






Common stock

251,629

247,667

249,493

246,314

246,751

Capital surplus

506,201

462,256

484,482

439,590

441,950

Accumulated other comprehensive loss

(53,252)

(69,924)

(80,491)

(91,650)

(88,751)

Retained earnings

1,622,542

1,586,586

1,552,253

1,522,121

1,472,133

Total Shareholders' Equity

2,327,120

2,226,585

2,205,737

2,116,375

2,072,083

Total Liabilities & Shareholders' Equity

$           18,936,814

$           18,314,183

$           18,001,540

$           17,249,175

$           17,222,491


 

 

BancorpSouth Bank

Consolidated Average Balance Sheets

(Unaudited)








Jun-19

Mar-19

Dec-18

Sep-18

Jun-18


(Dollars in thousands)

Assets






Cash and due from banks

$                202,564

$                213,415

$                218,553

$                179,098

$                203,220

Interest bearing deposits with other banks






and Federal funds sold

254,951

238,194

62,516

57,204

66,035

Available-for-sale securities, at fair value

2,733,335

2,704,383

2,784,437

2,814,751

2,906,235

Loans and leases

13,565,632

13,094,817

13,079,321

12,448,814

12,350,226

  Less:  Unearned income

16,041

16,596

15,899

15,113

15,470

             Allowance for credit losses

116,339

118,352

120,426

120,678

119,622

Net loans and leases

13,433,252

12,959,869

12,942,996

12,313,023

12,215,134

Loans held for sale

117,995

86,294

96,588

112,387

144,400

Premises and equipment, net

453,239

430,675

372,488

340,456

342,395

Accrued interest receivable

54,977

54,296

54,156

50,437

48,767

Goodwill

735,540

695,787

668,544

588,777

583,188

Other identifiable intangibles

49,058

50,115

47,567

37,529

39,752

Bank owned life insurance

313,550

306,134

305,888

305,476

305,016

Other real estate owned

7,313

9,555

15,048

6,245

8,997

Other assets

281,484

284,796

310,300

254,482

231,144

Total Assets

$           18,637,258

$           18,033,513

$           17,879,081

$           17,059,865

$           17,094,283

Liabilities






Deposits:






  Demand:  Noninterest bearing

$             4,307,570

$             4,078,027

$             4,284,521

$             4,076,890

$             3,976,039

                  Interest bearing

6,485,523

6,283,089

5,753,655

5,495,517

5,697,444

  Savings

1,872,552

1,837,197

1,836,148

1,794,229

1,820,013

  Other time

2,415,240

2,247,521

2,198,092

2,021,213

2,045,828

Total deposits

15,080,885

14,445,834

14,072,416

13,387,849

13,539,324

Securities sold under agreement to repurchase

484,950

457,875

447,727

427,583

416,839

Federal funds purchased






   and other short-term borrowing

499,385

664,056

953,137

918,153

875,641

Accrued interest payable

12,239

9,998

8,305

6,617

5,600

Long-term debt

5,403

5,826

17,403

33,196

33,147

Other liabilities

255,884

237,176

188,241

196,721

172,280

Total Liabilities

16,338,746

15,820,765

15,687,229

14,970,119

15,042,831

Shareholders' Equity






Common stock

252,351

248,810

250,752

246,635

247,120

Capital surplus

511,786

475,390

497,330

441,779

444,379

Accumulated other comprehensive loss

(66,048)

(78,255)

(91,541)

(89,244)

(88,962)

Retained earnings

1,600,423

1,566,803

1,535,311

1,490,576

1,448,915

Total Shareholders' Equity

2,298,512

2,212,748

2,191,852

2,089,746

2,051,452

Total Liabilities & Shareholders' Equity

$           18,637,258

$           18,033,513

$           17,879,081

$           17,059,865

$           17,094,283


 

 

BancorpSouth Bank

Consolidated Condensed Statements of Income

(Dollars in thousands, except per share data)

(Unaudited)
















Quarter Ended


Year to Date


Jun-19


Mar-19


Dec-18


Sep-18


Jun-18


Jun-19


Jun-18

INTEREST REVENUE:














Loans and leases

$      172,748


$     163,679


$        162,237


$      147,404


$     143,029


$    336,427


$    279,597

Deposits with other banks

1,292


1,516


457


243


331


2,808


995

Federal funds sold, securities purchased














   under agreement to resell, FHLB and 














      other equity investments

542


374


344


295


226


916


417

Available-for-sale securities:














    Taxable

13,223


12,437


12,208


11,529


11,554


25,660


22,867

    Tax-exempt

1,890


2,121


2,308


2,394


2,435


4,011


4,939

Loans held for sale

1,368


1,006


1,296


1,293


1,715


2,374


2,670

        Total interest revenue

191,063


181,133


178,850


163,158


159,290


372,196


311,485















INTEREST EXPENSE:














Interest bearing demand

14,741


13,139


10,191


8,113


6,075


27,880


11,353

Savings

1,348


1,338


1,367


1,087


667


2,686


1,251

Other time

9,635


8,065


6,967


5,399


4,862


17,700


9,319

Federal funds purchased and securities sold














   under agreement to repurchase

1,972


1,775


2,563


2,071


1,898


3,747


3,239

Short-term and long-term debt

3,349


4,262


4,880


4,353


3,660


7,611


6,115

Other

1


-


1


-


-


1


2

        Total interest expense

31,046


28,579


25,969


21,023


17,162


59,625


31,279















        Net interest revenue

160,017


152,554


152,881


142,135


142,128


312,571


280,206

  Provision for credit losses

500


500


1,000


-


2,500


1,000


3,500

        Net interest revenue, after provision for














          credit losses

159,517


152,054


151,881


142,135


139,628


311,571


276,706















NONINTEREST REVENUE:














Mortgage banking

351


2,040


(3,275)


6,517


6,904


2,391


20,169

Credit card, debit card and merchant fees

10,168


8,874


9,941


9,857


10,530


19,042


20,094

Deposit service charges

11,117


10,766


11,699


11,278


10,767


21,883


21,668

Security gains(losses), net

59


39


162


(54)


(2)


98


25

Insurance commissions

33,951


30,180


27,981


31,705


32,965


64,131


62,095

Wealth management

5,906


5,635


5,534


6,016


5,745


11,541


11,442

Other

4,780


6,686


6,989


6,297


5,547


11,466


15,897

        Total noninterest revenue

66,332


64,220


59,031


71,616


72,456


130,552


151,390















NONINTEREST EXPENSE:














Salaries and employee benefits

100,981


97,228


92,013


89,646


91,451


198,209


182,648

Occupancy, net of rental income

11,988


11,551


12,107


11,690


11,103


23,539


21,907

Equipment

4,423


3,888


3,837


3,994


3,804


8,311


7,558

Deposit insurance assessments

2,165


2,740


1,866


2,954


3,129


4,905


5,489

Other

38,117


34,561


42,519


34,125


35,695


72,678


75,281

        Total noninterest expense

157,674


149,968


152,342


142,409


145,182


307,642


292,883

        Income before income taxes

68,175


66,306


58,570


71,342


66,902


134,481


135,213

Income tax expense

15,118


14,708


11,473


4,659


12,856


29,826


27,676

        Net income

$        53,057


$       51,598


$          47,097


$        66,683


$       54,046


$    104,655


$    107,537















Net income per share: Basic

$            0.53


$           0.52


$              0.47


$            0.68


$           0.55


$          1.05


$          1.09

                                    Diluted

$            0.53


$           0.52


$              0.47


$            0.67


$           0.55


$          1.04


$          1.09


 

 

...

BancorpSouth Bank

Selected Loan Data

(Dollars in thousands)

(Unaudited)












Quarter Ended


Jun-19


Mar-19


Dec-18


Sep-18


Jun-18

LOAN AND LEASE PORTFOLIO:










Commercial and industrial

1,832,016


1,728,897


$   1,766,515


$    1,617,293


$  1,668,174

Real estate










   Consumer mortgages

3,422,661


3,242,769


3,259,390


3,184,674


3,143,215

   Home equity

670,352


663,120


663,572


655,213


653,450

   Agricultural

332,902


309,931


318,038


315,842


315,828

   Commercial and industrial-owner occupied

2,157,292


2,128,763


2,267,902


2,157,177


2,147,176

   Construction, acquisition and development

1,441,269


1,322,671


1,286,786


1,103,532


1,346,370

   Commercial real estate

3,287,453


3,169,117


3,026,214


2,923,791


2,636,533

Credit cards

101,024


99,260


105,569


102,353


102,790

All other

413,558


406,531


418,163


390,120


404,578

     Total loans

$ 13,658,527


$ 13,071,059


$ 13,112,149


$  12,449,995


$ 12,418,114











ALLOWANCE FOR CREDIT LOSSES:










Balance, beginning of period

$     116,499


$      120,070


$     121,019


$       119,920


$     119,434











Loans and leases charged-off:










Commercial and industrial

(866)


(819)


(1,042)


(322)


(1,057)

Real estate










   Consumer mortgages

(237)


(185)


(298)


(210)


(366)

   Home equity

(124)


(353)


(237)


(227)


(107)

   Agricultural

-


-


(6)


(6)


(6)

   Commercial and industrial-owner occupied

-


-


(237)


(315)


(279)

   Construction, acquisition and development

(45)


-


(142)


(41)


(66)

   Commercial real estate

(250)


(3,815)


(594)


-


(946)

Credit cards

(922)


(955)


(816)


(596)


(830)

All other

(912)


(831)


(761)


(941)


(551)

     Total loans charged-off

(3,356)


(6,958)


(4,133)


(2,658)


(4,208)











Recoveries:










Commercial and industrial

747


360


504


1,558


684

Real estate










   Consumer mortgages

244


1,081


419


522


361

   Home equity

179


75


86


58


72

   Agricultural

10


4


304


20


10

   Commercial and industrial-owner occupied

71


100


40


413


46

   Construction, acquisition and development

63


714


197


564


308

   Commercial real estate

218


78


139


200


149

Credit cards

223


218


245


198


367

All other

293


257


250


224


197

     Total recoveries

2,048


2,887


2,184


3,757


2,194